Digital Hustle T H E India - Flourish Ventures
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INDIA SPOTLIGHT India’s online platform economy has experienced a surge in recent years, expanding from early e-commerce in 2010 to a multitude of service platforms that have helped to formalize gig work opportunities such as ridesharing, delivery, and house cleaning. Online platforms have created new ways for workers to seek out income opportunities and access formal financial services, while also building a digital trail that helps financial institutions and fintechs better understand the needs of an underserved population. Gig workers in India have been hard hit by the COVID-19 pandemic and accompanying economic dislocation. As the country continues to grapple with the current crisis, financial institutions, fintechs, and platforms have an opportunity and a responsibility to understand the challenges gig workers face, as well as their financial aspirations and concerns as they look toward the future. As a global fintech investor committed to helping people capture economic opportunity and improve their financial outlook, Flourish Ventures seeks to better understand the financial impact of the pandemic on gig workers and how their livelihoods are changing, as well as how fintechs can better serve this population. This India Spotlight, in partnership with research firm 60 Decibels and local partners Avail Finance and Unitus Capital, represents the fourth study in The Digital Hustle, our global research series. The following results highlight the financial lives, concerns, and aspirations of nearly 800 gig workers in India during August 2020. Full results are available on our interactive dashboard at: app.60decibels.com/flourish-gigeconomy2020 Flourish © 2020 | All Rights Reserved. 2
INDIA SPOTLIGHT COVID-19 Impact on Livelihoods & Well-being India’s gig workers have been hard hit by the COVID-19 pandemic, with 87% now earning less than INR 15,000 per month (USD $200). Overall, 81% have experienced a large decline in income. Monthly income before and after the COVID-19 lockdown “ I have had no work since April because 50% no one is going anywhere. There is no hope until the lockdown lifts completely.” 23% 17% – Ridesharing driver March 8% 2% 0% Monthly 20,000- 15,000- 10,000- 5,000- < 5,000 income, 25,000+ 25,000 20,000 15,000 10,000 INR 2% 3% 7% Nearly 9 out of 10 workers August now earn less than INR 21% 15,000 per month (USD 29% $200), compared to 1 in 10 37% before the lockdown. Primary COVID-19 Concerns Across all respondents, 84% are concerned about COVID-19. At the time of our survey, respondents remain more concerned about the impact to their livelihoods than the risk to their health, indicating that thus far the economic crisis in India has outweighed health concerns for these workers. 17% 12% 5% 61% Access to My health or my Childcare Ability to work / earn an income basic needs family’s health Flourish © 2020 | All Rights Reserved. 3
INDIA SPOTLIGHT Some Gig Workers Impacted More Than Others Women continue to be underserved by the gig Ridesharing drivers are hardest hit. economy. We had a difficult time finding women The COVID-19 lockdown and to participate in this study, as India’s digital gig subsequent “no touch” economy is dominated primarily by men. Women are economy have hit underrepresented in the workforce as a whole, and ridesharing drivers they face a significant hurdle in the gig economy due hardest, although to unequal access to digital technology. Women in our all industries have study (primarily delivery workers and house cleaners) been affected. have carried a higher burden of supporting new financial dependents during the COVID-19 crisis, and women continue to have lower incomes than men. Large Decline in Income Women Men 90% Ridesharing drivers 75% Delivery workers 72% House cleaners Increase in Number of 34% 27% Dependents Large Decline in Quality of Life 69% Ridesharing drivers 74% 65% August Income 48% Delivery workers < INR 10,000 48% House cleaners USD $0-130 Government aid has alleviated some hardship. Only 12% 53% of those 42% of respondents received food provisions or of government who did not receive financial support from the government as part of aid recipients government aid the COVID-19 relief efforts. While still struggling, reported a lack reported a lack government aid recipients have a stronger sense of hope. of hope. of hope than those who did not receive aid. Flourish © 2020 | All Rights Reserved. 4
INDIA SPOTLIGHT Early City Epicenters Reaching State of Despair Worker sentiment varies widely by city based on the length and severity of the health crisis and economic dislocation. Lack of hope is widespread in Mumbai and New Delhi, which experienced the earliest virus outbreaks and longest lockdowns. Concerns are widespread in Chennai as well, where residents faced a recent spike in COVID-19 cases in July. Daily confirmed new cases Large Income Very Lack of (5-day moving average) Decline Concerned Hope Mumbai 3000 1,751 daily cases Hit earliest and longest, 2000 5/22/20 resulting in the highest 1000 76% 43% 62% percentage of respondents reporting a lack of hope. 0 May June July August 3,947 daily cases 6/24/20 New Delhi 3000 Enormous spike in late June 2000 with a recent uptick in August, 86% 83% 49% leading to highest levels of 1000 concern and a lack of hope. 0 May June July August Chennai 3000 2,358 daily cases 6/30/20 July spike has led to high levels 2000 of concern, but workers find 86% 68% 6% hope in aid from government, 1000 community, and gig platforms. 0 May June July August 2,993 daily cases 8/29/20 Bangalore 3000 Protected from the virus until 2000 recently, worker sentiment 76% 23% 27% has remained relatively high 1000 despite income decline. 0 May June July August 0 May June July August Source: Times of India Coronavirus Cases Flourish © 2020 | All Rights Reserved. 5
INDIA SPOTLIGHT Financial Resilience Some gig workers have a financial cushion, indicating greater resilience than expected. If you lost your main source of income, Q: how long could you continue to cover living expenses without borrowing money? Less than a week 20% At least a week, but not a month 27% Over half of workers could cover At least a month, but not 3 months 25% household expenses for more than a At least 3 months, month without but not 6 months 21% borrowing money if they lost their main source of income. More than 6 months 6% “ I am a self reliant person. I have my own bike and I have purchased my home. My company has paid me INR 300 daily during lockdown, and the rest I have covered with savings.” – Delivery worker Flourish © 2020 | All Rights Reserved. 6
INDIA SPOTLIGHT Coping Mechanisms Most gig workers have made sacrifices to cope with the COVID-19 crisis. 83% have relied on savings, 45% have reduced consumption, and 44% have borrowed money. Acting on the government sponsored loan moratorium, 57% have reduced or halted debt payments. Yet only 15% are finding new or additional work - likely because of the strictly enforced lockdown. How Gig Workers are Adapting 83% Used savings 57% Reduced or halted debt payments 58% Food 21% Transport 45% Cut consumption 18% Nonessentials 44% Borrowed money 22% Sold or pawned an asset 15% Found new or additional work “ I haven’t been able to pay my children’s school fees. We eat mostly rice and lentils now. We have reduced our vegetable consumption and we stopped drinking milk and tea.” – Ridesharing driver Flourish © 2020 | All Rights Reserved. 7
INDIA SPOTLIGHT Looking Forward As the lockdown lifts, workers seek to return to work and build greater financial stability. In the next 6 months, 89% of respondents confirmed they plan to continue with their Top Financial Concerns % Very Concerned previous work from before the crisis. 61% of respondents indicated that they need support in planning toward their 62% Ability to save for old age financial goals. 61% Ability to pay off debt Planning for the future is a top priority. 62% of respondents are very concerned with their ability to save for old age, and 26% Risk of getting sick or 61% are very concerned with ability to pay off debt. Debt in an accident and not repayment and saving for the future are also the top two being able to work financial goals across all respondents. 25% Access to sufficient cash Security is a moderate concern, particularly the risk of not to do my job being able to work. A number of respondents are meaningfully concerned about inability to work if they get sick or in an 14% Risk of vehicle or phone accident (26%), or if they damage their phone or vehicle (14%). breaking and not being Notably, a significant number of respondents (18%) listed able to work purchasing insurance (health, life, or asset) as a top financial goal. 11% Access to financing Ability to manage day-to-day cash flows is a moderate for assets concern. One in four respondents expressed a high level of concern about accessing sufficient cash for day-to-day work needs. This indicates that workers may lack short term liquidity to bridge the gap between daily work expenses (such as fuel) and payment. “ There is risk in my work. We are traveling and meeting people. Top Financial Goals If I fall sick then I cannot work or Pay off debt 75% make money.” Save for the future 64% – Delivery worker Find work with higher income 33% Purchase insurance Purchase a vehicle 13% 18% “ Since there have been floods in our village, I want to save up to Afford my own home 11% send money to my Afford my children’s education 7% family there.” – House cleaner Flourish © 2020 | All Rights Reserved. 8
INDIA SPOTLIGHT The Case for Fintech Solutions The India Spotlight provides some early insights that may inform how platforms and financial service providers can best serve a growing digital gig workforce. We believe fintech solutions have the potential to advance economic opportunity and improve gig workers’ financial outcomes. Gig platforms have become a growing form of employment for previously informal workers in India, and we expect this to be sustained through the pandemic and beyond. Yet there remains an important need among gig workers for access to formal solutions for financial planning, income protection, and day-to-day cash flow management. Flourish © 2020 | All Rights Reserved. 9
INDIA SPOTLIGHT Survey Methodology Flourish Ventures partnered with 60 Decibels, Avail Finance, and Unitus Capital to conduct an online survey of 770 gig workers in August 2020. Of these respondents, there were 322 ridesharing drivers, 307 delivery workers, and 141 house cleaning workers. Underlying data can be viewed at app.60decibels.com/flourish-gigeconomy2020 Authors: Tilman Ehrbeck, Harsh Gupta, Stella Klemperer, Anuradha Ramachandran Flourish is a global venture firm investing in entrepreneurs whose innovations advance economic opportunity and financial health for individuals and small businesses. We partner with industry leaders in research, policy and regulation to better understand the underserved and help foster a fair, more inclusive economy. flourishventures.com Avail Finance is a mobile-first platform that provides Indian blue collar workers with loans and other financial solutions. availfinance.in Unitus Capital is a boutique investment bank in India that facilitates access to capital for businesses to scale, innovate, and deliver deep social and environmental impact. unituscapital.com 60 Decibels is a tech-enabled social impact measurement and customer intelligence company. Spun out of Acumen, we make it easy for companies and organizations to listen to the people who matter most. 60decibels.com Flourish © 2020 | All Rights Reserved. 10
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